How to Stop Sabotaging Innovation

Innovation is often described as the creation of something new or a new way of doing something. Recognizing its potential benefits to operational performance and customer experience, most enterprises today say they want innovation, but they almost universally create conditions that impede it. Competing objectives such as cost control or service stability often take priority, creating a reluctance to listen sympathetically to the ideas brought forward by external partners who are looking for ways to enhance collaboration and value.

The new year promises new things, and to boost innovation and steal a march on the competition, enterprises should resolve to collaborate with providers and follow these Top 5 pointers:

Provide a mechanism. Try something radical. Set up an “Innovation Fund” into which you deposit $X million a year. Invite providers to bid for funding that will allow them to help you accomplish your goals, whether it be encouraging income growth, increasing automation or improving productivity. Use a bid template so providers can include details of the effort and the financial commitment required to successfully deliver the innovation. Then hold a monthly or quarterly Innovation Forum with the provider and business stakeholders to approve or reject bids. Setting aside real money that is clearly earmarked for innovation signals to providers that their ideas will be genuinely considered.

Share the corporate vision. Nurturing innovation requires granting providers access to business stakeholders and visibility into how you see your business evolving. The collaboration model of the future may be in the form of joint solution design, investment in or partnership with fintech or newtech firms, or even utility/white label joint ventures. In return for this new level of intimacy, let providers know you expect them to be proactive in bringing forward innovative ideas.

Change the mentality. Resist the temptation to treat providers as simply “IT or back-office vendors” and foster a spirit of true partnership in which all parties are working together to achieve shared goals. Take this example: a large Australian bank is considering creating a “steering panel” made up of senior business and IT leaders plus account executives from the ten largest external providers. To encourage the panel to collaboratively achieve business objectives, the bank has agreed to pay a bonus to the panel members – including provider account executives – if those objectives are met.

Focus on tailored solutions. Embrace providers that demonstrate deep domain knowledge and understanding. Your customers demand nothing less, so why should you? Many of the most exciting applications of emerging technologies such as the blockchain and the internet of things (IoT) are specific to particular industries, so don’t accept a one-size-fits-all approach.

Keep your eye on business outcomes. Where possible, map your services to the customer journey and create services that are end-to-end across typical functions. A horizontal view of services will help you select the right partner for providing seamless customer onboarding and business process as a service, while reducing the number of handoffs. Many providers are used to selling according to their service lines (data center, end-user computing ADM, etc.), so help them think in a new way about how they can use business-focused KPIs that are based on outcomes.

Owen Wheatley has built a decorated career, serving clients across multiple industries with a special focus on enterprises in the financial services sector. Advising clients on IT strategy and the digital agenda, Owen leads high-performance advisory teams to design and implement major transformation programs, structure complex transactions, negotiate with service providers and advise on a broad range of market trends and sourcing activities. Most recently, Owen worked with a large European bank to develop a new workforce strategy that optimizes internal resources and unlocks significant savings. While at a major UK-based retail bank, he led a large advisory team to define and implement an IT sourcing strategy that led to associated savings of more than £250 million. Owen holds a BSc in economics, is a chartered accountant fellow with PwC and has been widely published in his capacity as a recognized thought leader in his field.